Boat Insurance Information
If you’re a boat owner, insurance is definitely a subject you want to keep in mind. You may have many questions about this topic. What kind of boat insurance do you need? Is boat insurance required? How much will it cost to obtain insurance for a boat? In this article, we’ll cover the basics of boat insurance and answer these and other common questions. We’ll also provide some comprehensive tips on coverage and boat insurance costs. So whether you’re just starting out with boat ownership or you’ve been cruising for years, read on to learn how to keep your boat and wallet safe and secure on the water!
Do boats need insurance?
The short answer is yes – boats need insurance. In fact, it’s illegal in some states to operate a boat without insurance. And even when it comes to renting a boat some places may require that you acquire boaters insurance or rental boat insurance.
Boat Insurance Requirements in the Untied States
First and foremost, check with your state laws to see if carrying boat insurance is required. If it isn’t legally required, ask yourself how much financial risk you’re willing to take on if something were to happen to your vessel. No one wants to think about their boat sinking or being damaged in a storm, but it’s always best to be prepared for every scenario.
What kind of boat insurance do I need?
The first thing to determine is what your role is. Are you a boat owner looking for insurance for your personal vessel or do you plan on renting your boat? Are you planning on renting a boat before owning it and want to protect yourself from a huge bill in case of an accident?
Insurance for Boat Owners
Boat owners, need to look at coverage options based on whether the vessel will be used for personal recreation or rented out. If they plan on renting out the boat it is best to have rental insurance for boats that provides full coverage. This type of insurance should have coverage options for both vessel damage and passenger injuries. Different policies cover different things so make sure that you look for one that can cover the cost of damages to the boat as well as medical payments and other related items regarding any possible injuries to those on board.
It is crucial that if you plan on renting your boat, you verify and are aware of what your policy covers as well as the guidelines and regulations. Failure to adhere to required boat safety standards and regulations can void your policy even if you have been regularly paying for your insurance. Cover all your bases when it comes to boat rentals. Verify that damage or loss by sinking, fires, internal and external damages, etc are covered on top of any passenger injuries.
Boat owners that plan on operating the boat for their personal needs, may choose to just cover the value of the boat and damages related to it with recreational use. They can choose from “agreed value” policy vs “actual cash value” policies. The agreed value policy is normally more expensive because it covers the value of the boat at the time the policy is written up. While the actual cash value policy considers devaluation of the vessel over time and will cover the cash value of it at the time of damage or total loss.
Do you need rental boat insurance?
There are two types of boat rental insurance: boat insurance for the boat owner which we previously discussed, and in some cases rental insurance for the boat renter. Some boat rental places will require that the renter pay a fee to cover the rental boat insurance. In other cases, they may require that the boat renter obtain their own rental boat insurance, especially if the boat rental will be for longer periods of time.
Rental boat insurance for the renter covers the damages that may occur to the rented vessel while in your possession. If you’re renting a boat, it’s important to have rental insurance. Before renting a boat ask if boaters’ rental insurance is required or if they provide it as part of the rental fee. You don’t want to end up paying a huge bill if anything happens to the boat while in your possession.
How much does boat insurance cost?
There are many factors that play a role in calculating the boat insurance cost. These factors include: the type of boat, the amplitude of coverage, whether the boat is used for personal recreation, commercial use, or as a rental boat. The boat insurance cost will also vary based on the model and capacity of the boat. For example, high performance boats tend to have higher boat insurance rates than insurance for older boats that are covered only at cash value. Still, high performance boat insurance may be higher even in older models vs. sailboat insurance because of the higher risk of damage involved with the increased velocity and fast water speeds that most high performance boats operate under.
The Type of Boat Affects Boat Insurance Costs
The best boat insurance for older boats depends on your needs, verify the coverage and what each policy offers. Then check whether these suit your demands. If you just want a low priced boat insurance for older boats, look for “actual cash-value policies.” These tend to be the most affordable.
Keep in mind that even older boats can be more costly. This is the case in savage boats purchased at insurance boat auctions which may have higher insurance premiums than those of a similar non-savage boats depending on the severity of the past damage. However, this is not always the case and there are some really good boat deals at auctions so you should always do your own research and price comparisons.
An average boat insurance policy can cost anywhere from $250-$1,500 dollars a year, with higher-end boats and yachts surpassing this easily. The cost of performance boat insurance tends to be lower than yachts but higher than sailboats. This means that it could range around the $450-$1700 dollar mark depending on the liability coverage. Insurance rates for powerboats are sometimes dependent on the area they operate in. Some places require that powerboats operating there have a pollution liability to cover any type of spill or enviromental damage so consider this when doing a price comparison.
Sailboat insurance can actually be lower than some car insurances. Sailboat insurance cost is around $250 for a basic policy to about $1,600 for a higher end sailboat with wider insurance coverage.
Pontoon boat insurance is another popular boat insurance type that is frequently asked about and is not as high priced. How much does pontoon boat insurance cost? Many insurance rate companies claim to have basic coverage for pontoon boats at around $390-$900 dollars.
The most expensive boat insurances tend to be those for yachts. Yacht insurance costs can be up to 1%-5% of the yacht itself, making some yacht insurance hit the thousands in yearly rates. For example, a $50,000 dollar yacht may end up paying $1,500-$2,500 dollars a year for insurance.
Selecting the Best Boat Insurance For You
The best boat insurance will depend on your specific needs and the use you plan to give your boat. Consider what damages to your boat would be most likely to occur based on the type of exposure and use you give to it. If it will be used year-round or just seasonally, the types of recreational use, whether it will be sailing in coastal regions or inland. Then based on this make a list of what you would like to be covered for, complete damage, damage to yourself and others, etc.
Look at prices on full coverage for boats and what the different policies include or don’t. Check if you can have add ons that you feel you would benefit from and compare the cost-benefit as well as alternatives. We highly recommend that you have liability insurance coverage for boats and water skiers, especially if you plan to use your boat recreationally in areas prone to crowded marinas and water activities.
Best Insurance for Boats and Coverage Add Ons
Some additional add-on or extended coverage for boats insurance that you may want to look into are:
- Personal effects and fishing equipment: Some insurance companies offer plans that cover your fishing equipment or personal effects up to a certain amount, should these be damaged while out on the water. This is great for expensive instrumental belongings and specialized equipment that you want to ensure is protected.
- Medical payments coverage: This is a type of coverage that includes medical treatment payments and some hospital bills depending on the fine print in the policy, be sure to verify in what injuries are covered and what type of accidents are included. Also, ask about the details and full procedure for claims as well as amounts and premiums etc. Most boat rental insurance carriers offer this type of policy or add-on. Be sure to ask if it is something you need to pay extra for per person, especially if you are renting your boat.
- Towing service coverage: Towing your boat from a body of water to land or from water to another water location can be a costly when paid for separately. Some find this to be a very convenient coverage for insurance companies to offer. Geico insurance for boats offers this as an add on, allowing you to save significantly if this is something that you require recurringly.
- Cruising extension: Some boat insurance companies are able to offer cruising extension coverage as a temporary or additional seasonal add-on. This type of coverage is popular when traveling by boat to other water destinations outside of the United States. Mexico is a common destination that boaters travel to and therefore adding this to an insurance plan makes sense if this is your case.
Boat insurance is one of those things that’s required by law in some states and recommended in just about every situation. Whether you’re a weekend warrior or live on your vessel full-time, it’s important to understand what coverage options are available and how they can protect you. We encourage you to seek out the advice of a trusted insurance agent and further discuss your options in order to make a more informed decision for your specific situation.
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